Figure 2.1.Production Possibilities Schedule

-Refer to Figure 2.1.If the relative cost of steel were to rise,then the production possibilities schedule would:
A) Become steeper
B) Become flatter
C) Shift inward in a parallel manner
D) Shift outward in a parallel manner

Question

Figure 2.1.Production Possibilities Schedule
 
-Refer to Figure 2.1.If the relative cost of steel were to rise,then the production possibilities schedule would:
A) Become steeper 
B) Become flatter 
C) Shift inward in a parallel manner 
D) Shift outward in a parallel manner

Quizplus · Accepted Answer

If the relative cost of steel were to rise, then producing steel would become more costly, forcing the economy to give up more units of cars to produce the same amount of steel. This means that the opportunity cost of producing one good in terms of the other would increase, resulting in a steeper production possibilities schedule.